5.13 Recommendations

Tobacco products kill half of all long-term users, and cause a high incidence of serious disease, resulting in a severe burden on families, society and the state. In order to minimize this harm, all governments should implement comprehensive tobacco control measures tailored to the situation and needs of the country, regardless of the ownership of cigarette enterprises. 

The privatization, investment process, and agreements should be transparent, and it may be beneficial to draw upon the services of independent third parties to help manage and negotiate a fair deal.
Seeing as how the multi-national cigarette producers spend millions of dollars each year on aggressive and highly effective marketing and promotion, a comprehensive ban on all tobacco product marketing and promotion should be a key part of the regulatory framework for tobacco. Without a ban - or with only partial restrictions that leave many open channels through which companies can recruit new young smokers - countries run the risk of young people and teenagers beginning to smoke in very large numbers, a situation that is extremely difficult to reverse later because nicotine has such a powerful addictive effect.

Most importantly, governments should not allow private cigarette investors to influence tobacco tax policy. Tobacco taxes are the most effective policy instrument that governments have to affect the level of consumption of tobacco products in the country. Furthermore, tobacco excise taxes can raise very large amounts of tax revenue. The level and structure of tobacco taxes that will best serve the public interest and the country's fiscal interests are likely to be considerably higher than the level of taxes that cigarette manufacturers will want to see. There is growing evidence that increases in tobacco taxes are the single most effective way to reduce consumption. Because the percentage loss in consumption is lower than the percentage increase in price, increases in tobacco taxes decrease consumption and increase total tax revenues at the same time. This is a win-win situation for the governmental budget and for public health. However, it is not in the interests of cigarette companies who want to maximize their sales, and they tend to lobby hard in opposition to increases of excise taxes on tobacco products. In Ukraine, where the state no more owns tobacco-manufacturing enterprises, there is no conflict of interests between the enterprise profitability, which requires more cigarette sales, and the health of the population, which requires a reduction in the use of tobacco products. The main positive outcome of privatization and foreign investments is that the government would be free to pursue policies that will improve the well being of the citizens of the country.